A partial settlement has been reached in the lawsuit brought by the Carpenters Pension Trust Fund in the Coffee Creek Center kickback scheme.

The lawyers for the Northwest Indiana Regional Council of Carpenters Pension Trust Fund announced today that the fund will get $4.5 million from an insurance carrier to resolve claims against two former trustees of the pension fund, James Bohlen and Robert Novak, both of whom were on the pension fund board when it authorized the purchase of 55 acres at Coffee Creek Center for $10 million.

An agreement has also been reached, but not yet finalized, with former pension fund trustee Gerry Nannenga and his wife Debra. That agreement is pending in bankruptcy court, said Drew Peel, lead litigation counsel for the pension fund and a partner at Kirkland & Ellis LLP, the Chicago law firm representing the pension fund.

Claims by the pension fund are still remaining against Peter Manous, Kevin Pastrick, and Paul Ihle, Jr., all of whom have been indicted and are serving prison terms for their role in the land sale. Claims are still remaining against the Lake Erie Land Co. and against Sand Creek Sales & Development, Peel said.

“The Pension Fund remains committed to seeking full recovery from the remaining defendants for the losses that they are responsible for,” Peel said in a statement.

As part of the settlement announced today, the pension fund has agreed to dismiss its claims against Bohlen and Novak with no admission of fault or wrongdoing by them. In exchange, the pension fund will get $4.5 million from the insurance carrier as well as their cooperation in connection with the pension fund’s remaining claims against the others. The settlement also resolves counterclaims and third-party claims brought by Bohlen and Novak against others.

The Pension Fund brought its lawsuit against Nannenga in December, 2003 and the suit was expanded in September, 2004.

Following this settlement, related cases that were subsequently filed by the U.S. Department of Labor and five pension fund participants will also be resolved in substantial part. Both of these related cases asserted claims that were at least partially duplicative of those first asserted by the pension fund in its lawsuit. The settlements in these related cases do not involve any payments by or to the pension fund.

Nannenga, Manous, Pastrick and Ihle are all serving prison terms for their role in the kickback scheme. Nannenga was sentenced to 18 months; Manous, 27 months and a $200,000 fine; Pastrick, 37 months and a $177,000 fine; and Ihle, 21 months and a $33,000 fine.

Posted 5/16/2006